Fresh & Easy Neighborhood Market Preparing For A Spate of New Store Openings Beginning in August

The next Fresh & Easy store to open is (above) at 3rd and Carroll in San Francisco. [Photo credit: Fresh & Easy Buzz.]

Breaking Buzz: New Stores

Fresh & Easy Neighborhood Market has to date announced it will open one store in August - its second unit in San Francisco - which is in the 5800 Third Street condominium development at 3rd Street and Carroll Avenue in the city's Bayview District.

However, the 176-store Tesco-owned grocery chain is queuing up a number of stores for openings in August and the following months, Fresh & Easy Buzz has learned.

We broke the news in this May 14, 2011 story [Breaking Buzz: Fresh & Easy Neighborhood Market Plans August 24 Opening For Third & Carroll Store in San Francisco's Bayview District] that Tesco's Fresh & Easy planned to open the new store at 3rd Street and Carroll Avenue in San Francisco on August 24. [Also see - May 10, 2011: Breaking Buzz: Fresh & Easy Neighborhood Market Plans to Open First San Francisco Store at 32nd and Clement June 22.]

Two weeks later, on May 23, Fresh & Easy Neighborhood Market confirmed our report by announcing in a press release it would open its first store in San Francisco - at 32nd Avenue and Clement Street in the Outer Richmond District - June 22, and its second unit, the 3rd Street and Carroll Avenue store, August 24, just as we reported in the May 10 story.

[See - May 23, 2011: Fresh & Easy Neighborhood Market Confirms Our Reports First Two San Francisco Stores to Open June 22 and August 24, 2011. Also read - June 22, 2011: Tesco's Fresh & Easy Neighborhood Market Opens First Store in San Francisco - in Outer Richmond District.]

Fresh & Easy Neighborhood Market doesn't normally announce store opening dates until three-to-four weeks prior to the given date of the opening. However, sources at the grocery chain tell us since we reported the opening date of the 3rd Street and Carroll store in early May, the retailer decided in part based on that to announce the date, along with the June 22 store opening, even though it was more than three months in advance of the August 24 opening, because it was receiving numerous inquiries, asking if the date we reported was correct.

In addition to the 3rd Street and Carroll Avenue store's August 24 opening date, we reported earlier this year Fresh & Easy is queuing up three additional stores, all in Northern California, for openings soon.

Those three stores are in the cities of Hayward, Antioch and Fairfield. You can read the details and get the addresses of the stores in the two stories linked here - March 15, 2011: San Francisco, Antioch and Fairfield Stores Next Up in Northern California For Fresh & Easy Neighborhood Market; and May 15, 2011: Breaking Buzz: Tesco's Fresh & Easy Neighborhood Market Plans to Open Second Store in Hayward, California August 10.

In addition to correctly reporting the planned August 24, 2011 opening of the 3rd Street and Carroll Avenue Fresh & Easy store in San Francisco's Bayview neighborhood on May 10 (as well as the June 22 opening of the Outer Richmond District store), we reported in the May 15 story linked above that the Hayward store, located at A Street and Hesperian Boulevard, will open August 10.

The store will be the grocer's second unit in the East Bay Area city. Tesco opened its first Fresh & Easy store in Hayward - at Mission Boulevard and Rousseau Street - April 27, 2011.[See - April 27, 2011: Tesco's Fresh & Easy Neighborhood Market at 175 (Stores): Three New Stores Open in Northern California Today.]

We (and you) should know in a couple weeks or so if our reporting on the Hayward store's opening date is correct because if it is opening August 10, Fresh & Easy Neighborhood Market will announce it 3-4 weeks in advance.

We stand behind the reported date. But as we always say in the blog, new store opening dates are fluid and dynamic at Tesco's Fresh & Easy. Therefore, the dates are always subject to change, as has been the case since the first units were opened in November 2007.

In addition to the San Francisco and Hayward stores opening in August - currently we're looking for August-to-October opening dates for the Fairfield and Antioch units - Fresh & Easy Neighborhood Market is now preparing a fifth store in Northern California for an opening in the coming months. That store is at Tasmine Drive and Fair Oaks Avenue in Sunnyvale, making five units in Northern California at the top of the upcoming new store opening list at Tesco's Fresh & Easy.

Southern California

Fresh & Easy Neighborhood Market is also queuing up four stores in Southern California for the next round of openings, which will start in August.

The locations of the stores in Southern California next up are:

City/Address

>Anaheim - Euclid and Broadway

>Long Beach - Long Beach Boulevard and 5th Street

>Long Beach - Atlantic Avenue and 33rd Street

>Los Angeles - Coldwater Canyon Avenue and Sherman

This makes nine new Fresh & Easy stores set to open soon in California, based on our reporting to date. Fresh & Easy has so far only announced the opening date (August 24) of the store at 3rd Street and Carroll Avenue in San Francisco.

Fresh & Easy Buzz is the first and only publication that's reported these stores are next up to open.

Tesco said in April it plans to open about 50 Fresh & Easy stores this year, confirming our reports far in advance of that date, in which we said it would open 40-50 Fresh & Easy fresh food and grocery markets this year. [See our April 19, 2011 report here for details.]

So far this year Tesco has opened 22 Fresh & Easy stores - 12 in Northern California and 10 in Southern California. That leaves 28 Fresh & Easy units to be opened from August through December to hit the 50-store mark.

No Fresh & Easy stores are being opened this month.

One store, the unit at 32nd and Clement in San Francisco, was opened in June.

The 22 Fresh  Easy stores were opened between January and April of this year.

No new stores were opened in May.

We correctly reported in late 2010 and early 2011 that California would be the focus of Tesco's new store openings for 2011. It has been the case so far this year - and it will be for the remainder of 2011. For example, read this January 14, 2011 story: Tesco 'Banking' on California in 2011 For Fresh & Easy Neighborhood Market USA.

Tesco currently has 176 Fresh & Easy stores in California, Nevada and Arizona.

The stores are about 10,000 square-feet and offer about 5,000 SKUs of fresh foods - produce, meats, fresh-prepared foods - packaged food and grocery items, perishables, frozen foods, wine and beer (and liquor in some stores) and a limited selection of health and personal care and general merchandise products.

Of the 176 stores, 127 units are in California. There are 101 stores in Southern California, 12 units in Northern California, and seven stores respectively in the Bakersfield and Fresno metro regions in the Central Valley.

Additionally Tesco has 28 stores in metropolitan Phoenix, Arizona and 21 units in metro Las Vegas, Nevada.

Fresh & Easy Neighborhood Market hasn't opened any new stores in Arizona this year.

No new units in either state are set open this month. Thus far, based on our reporting, no new Fresh & Easy store openings are planned in Arizona and Nevada for August either.

In fact, Tesco closed six under-performing stores in Nevada and in Arizona in November 2010, along with one unit in Southern California, giving it 12 fewer stores in the two states combined than it had nine months ago. [See here.]

'Will it Play In Peoria?' Wal-Mart Will Open its Fifth Arizona Marketside Store Later This Year in Peoria, Arizona

With still a week yet left until it opens its first four small-format combination grocery and fresh foods Marketside stores in the Phoenix, Arizona Metro region cities of Gilbert, Chandler, Mesa and Tempe, Wal-Mart already is preparing another store to open later this year in the Arizona city of Peoria, Fresh & Easy buzz has learned. [The Mesa Marketside store is pictured above.]

The Peoria, Arizona store will be Wal-Mart's fifth Arizona Marketside store thus far.

Two new additional Marketside stores in Southern California, one in San Diego and the other in nearby Oceanside (both which we've reported on), are scheduled to open this year before the Peoria, Arizona store does, according to Amee Chande, vice president of strategy and marketing for Wal-Mart, Inc.

Additionally, as we've previously reported, Wal-Mart has identified other Arizona and Southern California locations for its Marketside stores, as well as looking for locations in Northern California, primarily in the San Francisco Bay Area.

Peoria, which is located in the Northwest Valley region in the Phoenix Metropolitan area, is Arizona's ninth-largest city with a population of about 153,592 (2007) residents.

Wal-Mart chose Peoria as the location for its fifth Marketside location based on research and demographic data the retailer has collected due to its extensive retail presence in Arizona with its Wal-Mart Supercenters, Sam's Club stores and Wal-Mart Neighborhood Market supermarkets, which all offer food and grocery items, according to a Wal-Mart source.

Peroria has a mix of residents including young professionals and high-income retirees. Wal-mart believes the community offers a good consumer base for its Marketside stores, which will offer about 5,000 -to- 10,000 ingredient skus (shelf-stable groceries, beverages and fresh foods like meat, produce, dairy and the like) and ready-to-eat and ready-to-heat fresh, prepared foods items made right in the stores.

Wal-Mart is referring to all of the food and grocery items the stores will offer as ingredients, positioning the Marketside stores as "food-centric," yet affordable combination fresh food and ingredient (read grocery) markets.

Marketside stores will offer basic groceries and natural, organic and specialty products; fresh produce, meat and bakery; beers, wines and spirits; and fresh, prepared foods, featuring an in-store kitchen and even a small sit-down eating area for customers to have breakfast, lunch or dinner at in the store.

Resources:

Recent related stories from Fresh & Easy Buzz - Wal-Mart and Marketside

Wal-Mart Offers its Own 'Peek' Inside it's Small-Format Marketside As Part of A One-Week Countdown to the Stores' Oct. 4 Openings in Arizona

Fresh & Easy Buzz Gets A Peek -- And it Was Only A Peek -- Inside One of the Four New Wal-Mart Marketside Stores Opening in Arizona On October 4

Real Estate Group Selling the Four Wal-Mart Marketside Small-Format Grocery Stores Set to Open on Oct. 4; Plus Data on the Store's Exact Sizes

Special Report: Wal-Mart, Inc. Studying Second Small-Format Food and Grocery Store Concept; the 'Bodega' or Modern Version of the Corner Grocery Store

CEO's Can Say the 'Darndest Things': Wal-Mart CEO Lee Scott Says He Has Faith Tesco Will Succeed With Fresh & Easy; It's A Small-Mart World After All

Wal-Mart's Chief Merchandising Officer Reiterates CEO's Words that it's 'Keeping Tabs' On Tesco's Fresh & Easy Today at Bank of America Conference

New Store Openings: Tesco Opens Fresh & Easy Store Number 71 in San Diego, California's Point Loma Neighborhood

Tesco opened its Fresh & Easy Neighborhood Market grocery store number 71 (pictured above) yesterday in the Point Loma neighborhood in sunny San Diego, California to a large crowd of grand opening day shoppers, many of whom told a Fresh & Easy Buzz correspondent they were looking for bargains to save them money in the currently poor California economy.

Tesco distributed its $5-off for any total grocery order of $20 or more coupons throughout the Point Loma neighborhood prior to yesterday's Fresh & Easy store grand opening. Many of the opening day shoppers were armed with one or more of these $5-off coupons, according to the Fresh & Easy Buzz correspondent who attended the store opening.

The Point Loma Fresh & Easy grocery market (pictured at top) is one of the retailer's built from the ground up design prototype stores rather than one that's been installed in a remodeled, formerly empty retail building, which is the case with the majority of the current 71 stores.

The built from the ground up Fresh & Easy grocery stores are much more attractive inside and out than the markets located in the remodeled empty retail buildings. The stores have many more windows which let natural light into the stores, along with having skylights that do the same, for example. The interior colors also are brighter and the stores are somewhat more shopper-friendly than the remodeled Fresh & Easy markets are, in our analysis and opinion.

The built from the ground up stores like the one that opened yesterday in San Diego's Point Loma neighborhood still have a sterile quality to them however, in our analysis. As we've discussed before, the format lacks a sense of place and a warmness that encourages shoppers to linger (and thus spend more money), in our observation.

If the Fresh & Easy grocery stores were complete no frills, discount grocery stores like Aldi USA's and Sav-A-Lot's small format U.S. stores for example, this sterility wouldn't be a problem. However, Tesco is trying to achieve a combination basic grocery and hybrid fresh and specialty foods market with Fresh & Easy. Therefore, such a format should be warmer and more inviting, with a better sense of place we believe.

Numerous shoppers have made the same observations we are making about the stores, in interviews we've conducted, as well as on a number of online review boards like yelp.com, chowhound.com, craigslist.com and a couple others.

But yesterday's grand opening at the approximately 10,000 square foot Point Loma neighborhood Fresh & Easy market, which was attended by CEO Tim Mason and other corporate executives as well as city of San Diego officials, was a busy one, according to our correspondent. Products ranging from fresh produce and basic grocery items to fresh, prepared foods were moving off the shelves at a good pace--with for example fresh produce items having to be refilled regularly--throughout the time our correspondent was at the store.

The Point Loma Fresh & Easy is the seventh unit to open in San Diego County. Thus far Tesco has Fresh & Easy Neighborhood Market grocery stores in the San Diego County cities of San Diego, Chula Vista, Escondido, Fallbrook, Casa de Oro and Vista.

In the next couple months Tesco is scheduled to open five more new Fresh & Easy stores in the following locations in San Diego County: Camino Santa Fe and Mira Mesa Boulevard, 32nd Street and University Avenue, Imperial Avenue and Valencia Parkway, Camino Del Norte and Dove Canyon Road (all in San Diego); and in the city of Lakeside at Winter Gardens Boulevard and Woodside Avenue.

The retailer is making a major commitment in San Diego County, as it is throughout Southern California, the Las Vegas Metropolitan region and the Phoenix Metropolitan area, the three current market focuses for Tesco's small-format combination fresh foods and basic grocery Fresh & Easy markets.

Beginning early next year Tesco will move into a number of new markets, all in California thus far. These new California markets include: The Lompoc/Oxnard/Santa Barbara coastal region in Southern California; the Bakersfield and Fresno Metro markets in the southern Central Valley; Modesto/Stockton in the Northern San Joaquin Valley; the Sacramento Metropolitan area; the San Francisco Bay Area; and the Monterey/Seaside market in Northern California's south coastal area.

The Fresh & Easy Buzz correspondent talked to dozens of shoppers at yesterday's grand opening. Three themes or reasons for attending the grand opening day emerged from those conversations. Those themes were: curiosity, looking for bargains, and deciding to attend because the attendees received the $5-off coupons.

It appears then that using the $5-off coupons to drive neighborhood residents to the store's grand opening worked well for Tesco's Fresh & Easy yesterday, as it has at some other store grand openings, based on the conversations the correspondent had with numerous shoppers yesterday.

The challenge for Tesco's Fresh & Easy is can it get these shoppers to return to the stores again and again without the $5 coupons, which when used for a grocery order of $20 doesn't leave much room for retailer margin at all?

In terms of bargain hunting, the challenge for Tesco's Fresh & Easy is the same challenge nearly all food retailers are facing right now in the poor U.S. economy. That challenge is attempting to convert the many bargain hunters into more regular primary or secondary customers rather than tertiary cherry picker shoppers.

Those $5-off coupons do encourage cherry picking in fact. But they may also build some shopper loyalty over time, although that's doubtful.

However, they can be a good short-term tool in a poor economy like is currently the case in the U.S. The problem is they are addictive to shoppers. Stop giving them out and the shoppers move on to the next deal--and retailer. For example, Wal-Mart doesn't use such coupons but it's turning in record sales and profits, especially in the food and grocery categories. Tesco will soon have to ask itself if its fresh & Easy stores can stand on their own without these deep discount coupons.

In terms of the curious grand opening day shoppers, we've found they tend to make up the majority of the crowds at supermarket grand openings of all brands, formats and companies. In fact, food and grocery retailers should celebrate the curious, as without them grand openings would most likely be duds. They may not spend a lot of money at the store grand opening in most cases but they sure can fill a store.

Just as it is a grocer's goal to convert grand opening day coupon users and bargain hunters into regular customers, so to is it a retailer's goal to convert those curiosity seekers into regular shoppers--keeping them as well as all consumers curious enough to return to its stores again and again.

In our analysis, Tesco needs to create much more consumer curiosity and excitement in all of its Fresh & Easy stores as a way to convert more irregular shoppers into primary and secondary Fresh & Easy store customers.

In order to do this, we suggest the retailer focus a bit more on in-store merchandising and promotional programs and a bit less on sending out new store opening press releases by the batch. Sure, the local newspapers--and Fresh & Easy Buzz--are likely to write about a new store opening. But it's fleeting publicity. Not to mention the fact that few consumers today even read local newspapers.

We think some exciting regular in-store events such as tastings of locally-produced food products, drawings and sweepstakes, a super-hot bargains of the week display of say six basic grocery items at blow out prices, and other related in-store merchandising and promotional events on a regular basis , would create that sense of excitement and thus consumer curiosity.

Tesco's Fresh & Easy can then use these events to drive its media marketing and public relations campaign, offering interesting stories to the press which reinforce what the retailer is doing where it counts--at retail.

Meanwhile, yesterday was a good grand opening day for the Point Loma neighborhood Fresh & Easy store. Our correspondent says store employees were spot on in performance and the store was well stocked when the doors opened in the morning.

Now that the grand opening is over of course, as is always the case in food and grocery retailing, the real work begins.

Southern California and Las Vegas: Upcoming Fresh & Easy New Store Openings

Pictured above is the Fresh & Easy Neighborhood Market store set to open on July 2 in Manhattan Beach, California. The photograph was taken by Fresh & Easy Buzz roving correspondent Reno Tom from in front of the Trader Joe's store just across the parking lot. The new Fresh & Easy and the Trader Joe's are neighborhoods in the shopping center and even share the same parking lot. Should be interesting.

Fresh & Easy Buzz has reported the next Fresh & Easy Neighborhood Market store set to open after the retailer's three month new store opening pause will be in Manhattan Beach, in Southern California on July 2.

Orange County Register (Orange County, Southern California) reporter and 'Fast Food Maven' blogger Nancy Luna emails F&E Buzz to let us know what's up next in terms of Southern California and Nevada new store openings after Manhattan Beach on July 2, based on her recent reporting:

>Las Vegas: A Fresh & Easy store will open in north Las Vegas soon after the July 2 opening of the Southern California store in Manhattan Beach.

>Southern California: On July 16, a Fresh & Easy market will open in the Southern California city of Fountain Valley, at Warner & Bushard. This will bring to seven the current total Fresh & Easy grocery markets in Orange County, with more on the way.

To date, Fresh & Easy has opened stores in the Orange County cities of: Orange, Huntington Beach, Laguna Hills, Anaheim, Buena Park and La Habra. More are planned in Orange (a second one), Fountain Valley, Fullerton and Westminster." (SEE MAP)

[Read the 'Fast Food Maven's' July 17 blog post here.]

Thanks FFM.

As Fresh & Easy Buzz has reported, beginning on July 2 with the opening of the Manhattan Beach Fresh & Easy grocery store, Tesco's Fresh & Easy Neighborhood Market will be resuming its frenetic new store opening blitz for the rest of the year, after the three month break.

That pace saw the food retailer opening a new store about every 2.5 -to- 3 days on average from November, 2007 until early April, 2008. Expect a similar pace between now and December, 2008. We will keep you posted with more new store locations soon.

Bakersfied, California Region Next Up On the Fresh & Easy Neighborhood Market New Store Parade

Bakersfield, California, best known as once being one of the top oil-producing regions in the United States, along with being the boyhood home of famous country western singers Buck Owens and Merle Haggard, will be the next new region in California that Tesco's Fresh & Easy Neighborhood Market marches into, when it opens at least six of its small-format, convenience-oriented grocery stores in the region either at the end of this year or in early 2009.

Tesco, the world's third-largest retailer, plans to open three Fresh & Easy grocery markets in Bakersfield--two in the northwest portion of the city and one in the southwest side of town. The retailer also plans two open two stores in the nearby Bakersfield suburbs of Delano and Wasco. Bakersfield, Delano and Wasco are located in Kern County. [Kern County is shaded in light green in the map above. See San Joaquin Valley on the map key.]

These six stores are only the initially units Tesco has planned for the region. Our commercial real estate sources, along with a source in the local community, tell us the grocer is looking for additional sites in the area for its grocery stores, which merchandise a limited-assortment of Fresh & Easy store brand and national brand everyday groceries, along with specialty and natural foods, fresh produce and meats, an extensive selection of prepared foods, wines and craft beers, fresh flowers, and some non-foods' products.

Fresh & Easy grocery stores average 10,000 -to- 13,000 square feet. There currently are 59 of the stores in Southern California, Arizona and the Metro Las Vegas, Nevada region. The retailer plans to open many more stores in these three states, especially in California and Arizona. Based on statements from Tesco, we believe the retailer wants to have as many as 200 stores opened by mid 2009.

Additionally, Tesco has signed leases for an initial 18 Fresh & Easy stores in Northern California's San Francisco Bay Area and is negotiating for more store sites in that region. Further, the grocer has inked leases on 19 sites for its small-format grocery markets in the Sacramento region in Northern California. Tesco also is negotiating leases for additional grocery store sites in the Sacramento area, as well as in the Northern San Joaquin Valley cities of Stockton, Tracy, Manteca and Modesto.

Fresno, which is between Bakersfield and the Stockton/Modesto region, also is on the retailer's radar screen for Fresh & Easy store locations. As we reported here yesterday, Tesco will likely sign a lease for a Northern California distribution center on land in Stockton, California, which is about a 30 minute drive from Sacramento and an hour from San Francisco.

Tesco's initial Bakersfield region Fresh & Easy grocery markets will be at the following locations:

• Olive Drive and Jewetta Avenue, Bakersfield
• Brimhall Road and Jewetta Avenue, Bakersfield
• Panama Lane and Stine Road, Bakersfield
• Cecil Avenue and High Street, Delano
• Highway 46 and Griffith Avenue, Wasco

The first of the initial six Bakersfield region Fresh & Easy grocery stores could open as early as the end of this year. However, it's more likely the stores will start opening in early 2009.

Most of these six stores will go into empty, existing commercial retail buildings in the region. This is a practice Tesco is employing for its Fresh & Easy stores. The retailer will locate a vacant (usually former supermarket or similar retail store) retail building, obtain a lease for it with generally favorable terms, and remodel the building to fit its 10,000 square foot -to- 13,000 square foot Fresh & Easy Neighborhood Market format. [Read a piece we did on this issue here.]

Not only does the grocer have a lower start-up cost by following this practice, versus building stores from the ground-up (although it is doing some of that), it also is able to go from lease to getting the store open and operating much faster, since the building shell and all its infrastructure is already in place, and Tesco has only to gut the interior, create a Fresh & Easy grocery store inside, and give the exterior a moderate remodel in order to create its Fresh & Easy store and retail brand.

Welcome to Bakersfield

Bakersfield is located in Kern County in the heart of California's Central Valley. It's about 110 miles from Los Angeles to the south and around 110 miles from Fresno to the north. The city's population is about 324,000, making it California's 11th most populous city. The Bakersfield Metropolitan region--which includes Delano and Wasco--has a population of about 780,000, which makes it the 65th largest metropolitan region in the United States.

The Bakersfield Metropolitan region has been fast-growing for the last few years. In fact, the city of Bakersfield is the 11th fastest-growing city in the U.S., according to data from the U.S. Census Bureau.

The city is actually more Midwestern USA than typical Californian in its culture, economy and political attitudes. The main sectors of the region's economy are: farming and agribusiness; the oil industry (petroleum extracting and refining); manufacturing, warehousing and trucking; and services, such as retail. Bakersfield also is home to a campus of the California State University system.

Bakersfield holds as a claim to its fame being the hometown of two famous country music legends, Merle Haggard and Buck Owens. both local country music stars made good have streets named after them in the city. And, Country Western is the music style of choice in Bakersfield. The city has dozens of country music venues (including a club owned by the family of the late Buck Owens), along with a number of professional recording studios. Bakersfield often is referred to as Nashville-West. The city also has a country music culture: you are more likely to see more people out at night wearing cowboy boots and hats than you are woman wearing stiletto high heels and men wearing suits and ties.

Politics in Bakersfield also is much more conservative than it is in the rest of California. The region has far more registered Republicans than it does Democrats. And, there are many more voters who describe themselves as conservative than in nearly every other part of California.

Politics is changing a bit in the region though. About 35% of the area's residents are Hispanic. Most of the region's Latino's are immigrants, thus immigration is a big issue for them. They tend to agree with Democrats more on the issue than they do with Republicans. As a result, the Democratic party is seeing an increase in party registration in the area, largely from Hispanics. African Americans comprise only about 5% of the area's population. Asian Americans are even less than that. Nearly 60% of Bakersfield population is white.

The region also is famous for its red-hot summers. It's not unusual for Bakersfield to have temperatures of 105 -to- 110 degrees for weeks at a time throughout the summer. Note to Fresh & Easy: You should make those Bakersfield region stores as energy efficient as possible. Also: look for higher than average air conditioning and other related bills from about May through September.

Analysis: Grocery retailing in Bakersfield

The Bakersfield grocery retailing market can best be described--like the region itself--as meat and potatoes. However, that doesn't suggest some of the region's key players--Safeway Stores, Inc-owned Von's, Modesto-based Save Mart, SuperValu-owned Albertsons and Save-A-Lot banner stores, Costco Wholesale, Kroger Co.-owned Food-4-Less and Foods Co., Smart and Final, Winco and Sam's Club--don't offer specialty, natural and organic groceries and produce, or prepared foods--because many of the them they do. There's also a Trader Joe's specialty grocery store in Bakersfield.

Rather, it just means you won't find scores of upscale, gourmet and natural foods stores in Bakersfield--Whole Foods Market, Gelson's, Bristol Farms, Raleys, Sprouts Farmers Market and others--like you do find in abundance in Southern and Northern California.

In particular, Safeway's Vons', offers good selections of specialty, natural and organic foods and grocery products in its stores, especially in its newer or remodeled stores, which have or are being converted to Safeway's upscale Lifestyle format. And, of course, Costco Wholesale is a major merchandiser of specialty and natural grocery products at reasonable prices. Some of the newer Save Mart banner stores (Save Mart also has Food Maxx warehouse stores in the region) also have good offerings of specialty, natural and organic products.

What all the above mentioned food retailers really do bring to the Bakersfield region though is heavy competition, especially on basic, everyday grocery products offered at a low-price. Costco, Save Mart's Food Maxx, Kroger's Food-4-Less and Foods Co, Winco, Wal-Mart's Sam's Club, and SuperValu, Inc.'s Save-A Lot are all no frills' warehouse-style, discount grocery stores. Price is king at these outlets.

Safeway's Vons, Save Mart's Save Mart banner supermarkets, and SuperValu, Inc.'s Albertsons, banner all focus on the lowest possible prices in their stores as well in the market because of this price pressure (even though two of the three retailers own both warehouse stores and supermarket banners) exerted by the highly competitive warehouse format sector.

In fact, the market share differences between Save Mart, SuperValu, Kroger Co.'s Food-4-less and Foods Co. and Safeway Stores, Inc.'s Vons is so close as to make the numbers near meaningless. Costco isn't far behind either.

Since half of Tesco's Fresh & Easy small-format grocery stores' business comes from selling basic groceries at low prices, the retailer will find a very competitive environment in Bakersfield in the low-price positioning sector when it opens it first stores there at the end of this year or in 2009.

Fresh & Easy's other offerings--prepared foods, specialty, natural and organic groceries, wines and craft beers, might find a less competitive market. However, both Vons and Albertsons are kicking-up both their specialty, natural and organic grocery selections (fresh produce too) in their respective region stores, as is Save Mart in its Save Mart banner stores.

In fact, because these grocers' stores are so much bigger than a Fresh & Easy Neighborhood Market store--they average 40,000 square feet -to- 65,000 square feet, compared to Fresh & Easy's approximate 10,000 square feet--most already merchandise a greater selection of specialty, natural and organic foods (including produce) than a normal Fresh & Easy grocery market does in general.

Rather than in the city of Bakersfield itself, Tesco's biggest opportunity with its small-format Fresh & Easy stores, might be in the surrounding smaller communities, such as Delano and Wasco. Many of these cities have populations ranging from 15,000 -to- 40,000 but have few grocery stores in them, especially those offering both basic groceries and more upscale offerings like prepared foods. This strategy--locating more stores outside Bakersfield in these smaller cities rather than in the city--might prove more successful to Tesco in our analysis.

Bakersfield is growing, not just in population but in food sophistication as well. So the timing could be good for Tesco, especially in relation to the fresh, prepared foods and other specialty-oriented product selections sold in the Fresh & Easy stores.

Of course, this growth in the Bakersfield region hasn't only been noticed by Tesco. Our sources tell us Whole Foods Market, Inc. is considering locating a supernatural lifestyle store in the city, and that Trader Joe's is considering opening an additional specialty market in the area as well. Vons, Albertsons and Save Mart also are upgrading their supermarkets, and specialty product selections--including prepared foods--in Bakersfield.

In other words, Tesco's Fresh & Easy Neighborhood Market could take some share away from these established retailers in the region. But its impending arrival also could spur these grocers on to prepare a very competitive welcoming for the United Kingdom-based retailer's small-format, convenience-oriented Fresh & Easy grocery stores come early next year.

Fresh & Easy: San Francisco Chronicle Covers F&E's Initial 18-Store San Francisco Bay Area Invasion

Yesterday we reported that Tesco's Fresh & Easy Neighborhood Market formally announced (in our case confirmed, since we've been reporting on the issue for some time) it has 18 locations, with signed leases, in the San Francisco Bay Area for its Fresh & Easy small-format, convenience-style grocery stores. (Click here to read our piece.)

The San Francisco Chronicle has a story in today's paper on the Fresh & Easy announcement. Although it doesn't provide any new information in terms of the facts, we wanted to share the Chronicle story with our readers, as it has a nice local flavor to it, as well as offering-up an interesting discussion.

Read today's Chronicle story here.

The Chronicle also has a great map graphic of the Bay Area that has each of the 18 Fresh & Easy store locations and addresses indicated on it. You can view the map here.

Additionally, you can view a picture of the site (click here) in San Francisco's Bayview-Hunters Point neighborhood where the Fresh & Easy store, which will be located at 3rd Street & Carroll Avenue, is being built. The Fresh & Easy will be the ground-floor retail anchor of a mixed-use residential development in the lower-income neighborhood which has long been neglected by food retailers.

Newest Fresh & Easy Store Opens in Fallbrook, California

A new 14,000 square foot Fresh & Easy Neighborhood Market store opened yesterday in the Southern California city of Fallbrook, which is located in San Diego County in the southern most part of the Golden State.

The Fallbrook store's grand opening was a bit more subdued than the one the day before for Fresh & Easy's new store on Hollywood Blvd., in Hollywood, California. (Read our piece from Wednesday on the Hollywood store grand opening here.)

It was however a grand, grand opening none-the-less. Several Fresh & Easy Neighborhood Market executives joined the store's manager, store associates and local city VIP's to cut a ribbon and officially open the newest grocery store in this city of about 35,000.

And although it isn't Hollywood, the city has its own claim to fame: The area around the city is known for its avocado groves and avocado farming industry. And in celebration of that, the city of Fallbrook has proclaimed itself the "Avocado Capital of the World." Each spring the city holds its Avocado Festival, which draws thousands of people from miles around to the city to celebrate the local avocado bounty.

The Fallbrook store is the 34th Fresh & Easy grocery market to open since November 5, 2007, when the first stores opened in Southern California. Fresh & Easy, which is owned by British mega-retailer Tesco, currently operates stores in Southern California, Arizona and Nevada. The grocer plans to enter Northern California later this year with its small-format stores, which combine basic groceries at a low price, with fresh, prepared and specialty foods items. (Read our story from yesterday about Fresh & Easy's Northern California plans here.)

There were a couple hundred local residents at the Fallbrook Fresh & Easy store grand opening yesterday. Most of the them rushed into the store when the doors were open for the first time. The Fresh & Easy is in a former Do-It Center home improvement store building which had been vacant for some time until Fresh & Easy remodeled it to fit its format.

Local members of the Fallbrook Chamber of Commerce expressed much pleasure with the fact that the grocer took an empty retail building and turned it into a food store. Fallbrook Chamber director Bob Leonard said he believed the new Fresh & Easy would help to stimulate the local economy by keeping shoppers who drive out of town for prepared, organic and specialty foods in town, shopping at the market.

As part of the grand opening celebration, Fresh & Easy gave a $1,000 donation to the Angel's Society, a local charity. The grocer makes a $1,000 donation to a local non-profit group chosen by store associates each time it opens a new store.

Leonard of the Chamber of Commerce said that although the city has a number of large supermarkets, including an Albertsons and two good-sized popular independents, he thinks Fresh & Easy will do well in the community, especially with the store's selection of prepared, natural, organic and specialty foods and groceries, which he added aren't available in the other local supermarkets to a large degree.

In closing, we would expect the Fallbrook Fresh & Easy store to make sure it has a very large fresh avocado display in its produce department come harvest season, not to mention making sure it sells every type of grocery product it can find with avocados as part of its ingredients: avocado chip dips, oils, salad dressings, breads, and on and on. After all, the store is located in the "Avocado Capital of the World."

New Fresh & Easy store opens in Huntington Beach, California

The newest Fresh & Easy Neighborhood Market store opened yesterday morning at 10 a.m. in the Southern California city of Huntington Beach. It's the first Fresh & Easy in that city.

Huntington Beach mayor Debbie Cook (pictured below with scissors in hand), joined by Fresh & Easy executives and store employees, cut a ribbon before the store's doors officially opened to kick-off the market's grand opening celebration.

Fresh & Easy store associates presented a $1,000 check to representatives of the West County Boys and Girls Club, a local non-profit youth group. The retailer donates $1,000 to a local community organization each time it opens a new store.

According to sources at the grand opening, there were about 100 people--some waiting in line, others arriving shortly after the store opened--who packed the store when it opened.

Huntington Beach is located in Southern California's Orange County, which is a key target region for Fresh & Easy stores. A second store in Huntington Beach is set to open soon. Additionally, a store located in the Orange County city of Fountain Valley is scheduled to be open shortly. These two stores will bring the total number of Fresh & Easy stores in Orange County to date to about six, with many more on the way.

Our sources at the grand opening said shoppers crowded the aisles after the store opened, picking up grocery items and prepared foods. The store offered free samples of its prepared foods as part of the grand opening celebration.

They further told us that many of the shoppers compared the Fresh & Easy to Trader Joe's. Many also commented they liked the fact that, unlike Trader Joe's, the Fresh & Easy grocery market offers basic grocery and non-foods items, both under the Fresh & Easy label, as well as national brands.

(Note: Photographs of yesterday's Fresh & Easy store grand opening in Huntington Beach courtesy of "Greetings From Downtown Huntington Beach.")

Fresh & Easy Planning New Store in Loma Linda, Southern California

Fresh & Easy has submitted plans to locate a new grocery market at the northwest corner of Redlands Blvd. and Mountain View Avenue in the Southern California city of Loma Linda, reports The Sun, a newspaper in San Bernardino County, where Loma Linda is located.

San Bernardino County, in Southern California's Inland Empire region, is a key market for Tesco's planned Fresh & Easy Neighborhood Market empire. In the next two years, Tesco plans to open 18-20 stores in the fast-growing county. The retailer has said it plans on opening about 130-200 stores in California, Arizona and Nevada in the 2008 to 2009 time period. Currently, there are about 30 stores open in the three-state region. The first stores opened just two months ago, in early November, 2007.

If the plans are approved by the Loma Linda planning commission on January 23, and then by the city council after that--which looks likely--the Fresh & Easy store would be the retail anchor for a 26,000 square foot shopping center at the location. The center, which would be built on a 2.6 acre lot that's been vacant for years, would also include other retail stores and a fast food restaurant, according to The Sun.

With it's rapid store development plan, Fresh & Easy has been renovating numerous previous empty retail buildings in Southern California for its 10,000 to 13,000 square foot grocery markets. Additionally, it plans to locate stores in a number of spots, like the Loma Linda location, that are looking to be developed by builders and need a retail anchor tenant.

There appears to be widespread support among members of the city's planning commission and city council (including the city's mayor) for Fresh & Easy to locate a store in the currently vacant site.

(Read the full story here.)